Yes, I have a house and a mortgage so this would mean a lot of personal pain.
But sometimes you have to think about the good of the country and the world.
Besides, when pain is inevitable it makes good sense to find the bright side.
Yesterday, under the headline, “The New Youth Normal – Your Parents’ Basement,” Tyler Durden wrote at Zero Hedge,
Well over a year ago, we first suggested that the conventional wisdom thesis for the bounce in home prices – namely a spurt in household formation – was dead wrong. Sure enough, as has been confirmed empirically, the only reason for the latest dead cat bounce in home prices has been the Fed, and banks complicit in engaging in “foreclosure stuffing.” And while it was easy to deflect the topic of just what is driving the housing market (because none of the bulls would want to admit it is just another credit and liquidity-driven bubble) for over a year, with the traditional “things will be back to normal soon” fall back used every time, as time passed and none of the traditional ingredients for a housing recovery fell into place, some started scratching their heads. This came to a boiling point today, when real-estate firm Trulia, looking at the latest Census Bureau data on household formation, finally threw in the towel and rang the panic button as not only have young Americans set anchor in their parents’ basement, but even refuse to get a job.
Among other negative signs, “Census 3Q homeownership, vacancy survey shows household formation ‘alarmingly slow,’ vacancies ‘remain stubbornly high,’ Trulia chief economist Jed Kolko writes in note.” Also, “Slow household formation number is one of the most alarming housing indicators to come out this year,” and “Share of millennials living with their parents rose to 31.6% vs 31.4%” year to year.
Notice that Obamacare is designed to encourage this social stagnation—it’s much-repeated boast to cover adult children until they are twenty-six years old.
This phenomenon has come about in other countries. Japan has been a deflationary ghost economy for two decades and it has given rise to a national phenomenon of adult-child room-dwellers who refuse to go outside. (Oh, did I forget to mention, another phenomenon is young men who have lost interest in sex?) Anecdotally, there is some evidence that in the US, parents are part of the problem.
Other consequences are for more toxic than a mere absence of income or an ability to contribute to the housing market. Even the few couples who do marry are avoiding children due to economic pressure. This means that we will be feeling the cascading effects of this recession and debt crisis for decades to come.
We need a reset for the sake of future generations.
We need housing to suddenly become so cheap that the basement dwellers can afford to move out of their parents’ basements and start forming households.
And we need to learn that these government/central banking boom/bust cycles are not a game. The truly degrade civilization.